Hummer vehicles on sale are seen at a dealer in New York, the United States, May 27, 2009. General Motors Corp (GM) announced on June 2 that it has entered into a memorandum of understanding (MoU) with a buyer for HUMMER, its premium off-road brand, a day after it filed for bankruptcy protection.[Xinhua]
US automaker General Motors Corp. has reached a deal to sell its Hummer brand to Sichuan Tengzhong Heavy Industrial Machinery Co. Ltd., a private business in southwest China's Sichuan Province, the automaker said Tuesday.
According to a Detroit News report, GM did not reveal the sale price, though in a bankruptcy filing, GM said the brand is worth some 500 million U.S. dollars.
The sale is expected to be completed by the end of the third quarter this year, and is subject to customary closing conditions, including receipt of applicable regulatory approvals, GM said in a news release.
It is hoped to secure more than 3,000 U.S. jobs in manufacturing, engineering and at Hummer dealerships around the country. As part of the proposed transaction, GM said, Hummer will continue to contract vehicle manufacturing and business services from GM during a defined transitional period.
Chinese-based Sichuan Tengzhong Heavy Industrial Machinery Co., Ltd. largely deals in production of specialist vehicles, road & bridge components, construction machinery and petrochemical equipment.
"We will be investing in the Hummer brand and its research and development capabilities, which will allow Hummer to better meet demand for new products such as more fuel-efficient vehicles in the U.S.," Tengzhong CEO Yang Yi said in a prepared statement.
The Hummer headquarters and operations will remain in the United States, and executives plan to expand the dealer network globally, including new and underserved Chinese markets.
"With Tengzhong's investment and strong support, we will be able to make our visions a reality," Hummer CEO James Taylor said in a prepared statement.
White House spokesman Robert Gibbs says the Obama administration, with GM's 60 percent ownership stake, will not stop it from outsourcing production to China.
With a plan to finish its restructuring within 90 days, GM aims to become a more competitive vehicle producer. It is preparing to offload its non-core brands including Hummer, Saab, Saturn and Pontiac.
(China.org.cn, Xinhua News Agency June 3, 2009)